The Texas DTPA, Explained

The DTPA has a reputation as the statute that lets any unhappy Texas buyer sue any business over anything. The chapter is broad, and it is also fenced. Whoever sues has to fit the statute's own definition of a consumer, and the conduct has to fit one of four openings. Miss either and the rest of subchapter E of the Texas Business and Commerce Code is of no use.

The statute names itself the Deceptive Trade Practices-Consumer Protection Act and runs from section 17.41 through section 17.63. Section 17.44(a) directs courts to construe it liberally, which operates on the words the legislature wrote. Several doors here were closed deliberately.

Standing turns on the transaction, not on the harm

Section 17.45(4) defines a consumer as an individual, partnership, corporation, this state, or a subdivision or agency of this state who seeks or acquires goods or services by purchase or lease. Both verbs count, so a shopper who was misled and walked away is not automatically outside the term. What the definition insists on is the purchase or lease relationship. The nouns are generous: goods under section 17.45(1) include real property purchased or leased for use, and the services definition in section 17.45(2) expressly covers work furnished when goods are sold or repaired.

Because corporations sit in that list, a company that buys something can be a consumer, with one exception. Section 17.45(4) removes from the term a business consumer that has assets of $25 million or more, and one owned or controlled by a corporation or entity with assets of $25 million or more. The measure is assets, not revenue and not the price of the purchase. Section 17.45(10) defines a business consumer as an individual, partnership, or corporation acquiring for commercial or business use, and excludes the state and its subdivisions and agencies from that term.

Four ways in, and only four

Section 17.50(a) is the private right of action, and every route through it carries one causation requirement: the conduct has to be a producing cause of economic damages or damages for mental anguish. Within that frame it lists four bases and stops.

1. Section 17.50(a)(1): a false, misleading, or deceptive act or practice that is both specifically enumerated in a subdivision of section 17.46(b) and relied on by a consumer to the consumer's detriment.
2. Section 17.50(a)(2): breach of an express or implied warranty.
3. Section 17.50(a)(3): any unconscionable action or course of action by any person.
4. Section 17.50(a)(4): an act or practice violating chapter 541 of the Texas Insurance Code.

Detrimental reliance appears in the first basis and nowhere else, which is why the third repays close reading rather than being read as a restatement of the first. What a prevailing consumer recovers, and the notice and deadline that come first, belong to a separate guide on DTPA notice, deadlines, and damages.

The laundry list runs to 34 items, and a ceiling sits above it

Section 17.46(a) declares false, misleading, or deceptive acts or practices in the conduct of any trade or commerce unlawful and subject to action by the consumer protection division. Subsection (b) then enumerates particular practices, introduced by the phrase "includes, but is not limited to." In the official text this page was checked against, that enumeration runs from item (1) through item (34), with no gaps and no repeated numbers.

These items do not collapse into one theme. Four of them, representative rather than exhaustive:

• Item (5), representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities they do not have, or that a person has a sponsorship, approval, status, affiliation, or connection the person does not.
• Item (9), advertising goods or services with intent not to sell them as advertised.
• Item (13), knowingly making false or misleading statements of fact about the need for parts, replacement, or repair service. The knowledge element is express here and unusual on the list.
• Item (24), failing to disclose information known at the time of the transaction, where the failure was intended to induce the consumer into a transaction the consumer would not have entered had it been disclosed.

Now the ceiling. That "not limited to" phrasing invites the reading that a private plaintiff can sue over any deceptive act, listed or not. Subsection (d) forecloses it: for the relief authorized in section 17.50(a)(1), the term is limited to acts enumerated in specific subdivisions of subsection (b). The open-ended prohibition in subsection (a) is enforcement machinery for the attorney general's consumer protection division. A private claimant who cannot name a subdivision has to reach another basis or has nothing here.

Unconscionability is a separate basis with its own test

Section 17.50(a)(3) reaches any unconscionable action or course of action by any person, and section 17.45(5) supplies the meaning: an act or practice which, to a consumer's detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree. No misrepresentation is required and no enumerated item. What is required is the degree, a demanding standard rather than a label for any lopsided bargain.

Warranty claims borrow the warranty from elsewhere

Section 17.50(a)(2) states its basis in seven words and works by borrowing, because the chapter creates no warranties of its own. It supplies a remedy for breach of a warranty that exists under other law. Section 17.46(b)(20) draws the boundary from the other side, forbidding a representation that a guaranty or warranty confers rights or remedies it does not confer, while adding that nothing in the subchapter expands the implied warranty of merchantability beyond obligations appropriate to the goods.

The exemptions, which are not variations on one idea

Section 17.49 holds the exclusions, written at different times for different reasons. Reading them as one rule about large deals is how a viable claim gets abandoned.

Injury, death, and mental anguish sit outside the subchapter

Section 17.49(e) says that except as specifically provided by section 17.50(b) and section 17.50(h), nothing in the subchapter applies to a cause of action for bodily injury or death or for the infliction of mental anguish. It is not a personal injury statute.

Advertising media, federally authorized practices, and licensed brokers

Section 17.49(a) exempts the owner and the employees of a regularly published newspaper, magazine, or telephone directory, or of a broadcast station or a billboard, where an offending advertisement was published or disseminated, unless it is established that they had knowledge of the false, deceptive, or misleading acts or practices the subchapter declares unlawful, or a direct or substantial financial interest in the sale or distribution of the unlawfully advertised good or service.

Section 17.49(b) exempts acts or practices authorized under specific rules or regulations promulgated by the Federal Trade Commission under Section 5(a)(1) of the Federal Trade Commission Act, and then narrows itself: the subchapter does apply to any act prohibited or not specifically authorized by such a rule, and an act is not specifically authorized if no rule or regulation has been issued on it.

Section 17.49(i) exempts a claim against a person licensed as a broker or salesperson under chapter 1101 of the Occupations Code arising from an act or omission while acting in that capacity. It carries three carve-backs of its own, mirroring the professional-services ones: an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion; a failure to disclose information in violation of section 17.46(b)(24); and an unconscionable action or course of action that cannot be so characterized.

Professional services, and five things that stay in

Section 17.49(c) removes a claim for damages based on the rendering of a professional service, the essence of which is providing advice, judgment, opinion, or similar professional skill. Five carve-backs follow, each a full exception to the exemption: an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion; a failure to disclose in violation of section 17.46(b)(24); an unconscionable action or course of action that cannot be so characterized; breach of an express warranty that cannot be so characterized; and a violation of section 17.46(b)(26). Section 17.49(d) shuts the workaround, extending the exemption to any entity that could be found vicariously liable for that conduct.

Two consideration thresholds that ask different questions

Section 17.49(f) applies only to a claim arising out of a written contract, and only where all three of its conditions hold together. The contract has to relate to a transaction, a project, or a set of transactions related to the same project involving total consideration by the consumer of more than $100,000. The consumer has to have been represented in negotiating it by legal counsel not directly or indirectly identified, suggested, or selected by the defendant or an agent of the defendant. And the contract must not involve the consumer's residence. Remove one condition and the exemption fails.

Section 17.49(g) is shorter and harder to step around. Any cause of action arising from a transaction, a project, or a set of transactions relating to the same project involving total consideration by the consumer of more than $500,000 falls outside the chapter, other than one involving a consumer's residence. No written contract is required here, and no legal counsel.

Both read "more than," so a deal landing exactly on either figure is not exempted by them, and both spare the residence, defined by section 17.45(12) as a building that is a single-family house, duplex, triplex, or quadruplex, or a unit in a multiunit residential structure in which title to the individual units is transferred to the owners under a condominium or cooperative system, and that is occupied or to be occupied as the consumer's residence. Neither figure is the $25 million in section 17.45(4). That number sizes the plaintiff. These two size the deal.

Waivers begin at void

Section 17.42(a) declares any waiver by a consumer of the subchapter's provisions contrary to public policy, unenforceable, and void, then opens a narrow door. A waiver is valid where it is in writing and signed by the consumer, the consumer is not in a significantly disparate bargaining position, and the consumer is represented by legal counsel in seeking or acquiring the goods or services. The three conditions are cumulative, and section 17.42(b) qualifies the third: the waiver fails if that counsel was directly or indirectly identified, suggested, or selected by a defendant or a defendant's agent.

Form is part of validity. Section 17.42(c) requires the waiver to be conspicuous, in bold-face type of at least 10 points in size, headed "Waiver of Consumer Rights" or words of similar meaning, and in substantially the form the subsection prints. Section 17.42(e) marks the outer limit of a signature: it is no defense to an action brought by the attorney general under section 17.47.

A DTPA question is settled by classification well before anyone argues about whether a business behaved badly. The neighboring subjects in the Texas consumer protection guides rest on statutes of their own, cited the same way across our guides to Texas law.